Development and social policy in South Asia

A specific type of welfare state in the making?

South Asia is home to about 22% of the global population; about one third of the population is extremely poor, accounting for about 45% of the global poor living on less than the infamous US$1.25 per day. 70% of the South Asia population lives on less than US$2 per day. With Gini coefficients hovering around 0.35, poverty while omnipresent is less unequal than in many countries of Africa and Latin America. A book review by Michael Cichon

The national Human Development Indexes (HDIs) show wide differences between countries, with Sri Lanka leading the list of the core South-Asian countries (Bangladesh, India, Maldives, Nepal, Pakistan and Sri Lanka) ranking 92 out of 187 countries. The average HDI for the entire region is the second lowest in the World just ahead of Sub-Saharan Africa. Hence social policy in the region faces huge challenges.

● A South-Asian geography of welfare states?

We know for decades that well designed welfare policies can alleviate poverty and inequality substantially - even in low-income countries. This book (see reference) sets out to analyze how welfare policies in South Asia tackle their challenges and whether their interventions follow a common – typical South-Asian – pattern. The book has three major parts:

The first part places the emerging South-Asian welfare states in a conceptual context and seeks to establish whether a South-Asian type of developmental welfare state is emerging with sufficient inter-country similarities that would justify its categorization as a South-Asian “geography of welfare states” along the conceptual framework developed by Esping-Andersen or the Bath school of social policy. Part I is written by three leading international experts in social policy and development (G. Köhler, D. Chopra and A. Bonnerjee). The quality of the analysis and the breadth of conceptual information are commensurate with the outstanding reputation of the three authors.

Chapter 2 by Gabriele Köhler provides an overview of the history of public policy in the region and the welfare state developments during the last decade. She asks the central question whether – despite the prevalence of large-scale tax financed transfers with rather wide population and a tendency towards rights based provision of benefits – the region has a “common developmental welfare state identity”, and, if so whether that is different from welfare states in other regions.

Aniruddha Bonnerjee analyses the fiscal space in the region and concludes that overall public revenue in the region is in the order of 11 to 12% of GDP, has been stagnant and has “merely kept pace with GDP growth” during the last two decades. Allocations to finance social expenditure within the – by international comparison – rather limited envelop of public resources are substantial in some cases but could be increased by reallocating other expenditure such as excessive military spending. In addition the need to increase revenues by additional and higher taxes if higher levels of transfers were to be financed was stressed. Unfortunately the concrete financing mechanisms that could yield additional expenditure could not be developed within the constraints of this analysis.

● New developments in social protection

Part two contains detailed, solid and well researched portraits of social policy development in the individual countries of the region and notably describes in a concise and informative way the different social policy innovations respectively the welfare state regressions (Sri Lanka) that have been introduced in the region since 2004. This was a period of major change in the political trajectories of these countries – such as the end of conflict in Nepal and Sri Lanka and the emergence of new government coalitions in Bangladesh, Pakistan, India and the Maldives which lead to or required policy change.

It shows interesting examples of new social protection developments in particular in Pakistan (an income benefit for women), in Nepal (a new child benefit), in the Maldives (innovations in housing and transport) and in India (i.e. a whole array of policies addressing education, health, the needs of ethnic minorities and informal sector workers as well as the self-targeting employment guarantee schemes for the rural unemployed (MGNREGA)).

All chapter authors are credible social policy observers based in South Asia where they work as academics, policy makers, policy advocates, or a combination of these functions. If their analyses have lacunae than it is perhaps that they largely ignore the role of the classical social security instruments – like national provident funds often inherited from colonial pasts – and their role, need for reform and financial space they take up in the overall national social budgets despite their limited protective effectiveness.

● Mixed trends and levels of social expenditure

Part three of the book returns to the fundamental question whether there is a unique type of South-Asian welfare state. Bonnerjee – in an informative factual chapter that appears artificially and unnecessarily separated from his chapter on fiscal space in the first part of the book – analyses the structure of social expenditure. She finds a rather “mixed bag” of trends and levels of expenditure not indicating an overall clear and sustained commitment to substantial increases of social expenditure.

Chopra finally answers Köhler’s basic question on whether there is a unique South-Asian geography of developmental welfare states with the sombre conclusion that ”it is hard to say” but she sees the South-Asian countries on a ”journey in which notion of welfare, development and rights are being upheld…”.

● Unique and systematic approach

While many studies were undertaken over the last decades on new or old social policy experience of East Asia, Latin America or Africa, this is the first ever effort to systematically compile, map, analyse and systematise social policy and social protection policies and their relation to wider societal development trajectories and in the South Asia region. It traces policies in the area of education, health, and social security. It features the intentions of policy makers, discerns the design and blueprints of welfare policies and tracks the process and politics of change. That combination of approaches makes it unique. It seeks to strike an ambitious balance between the academic objective to theoretically categorize developments and the pragmatic stocktaking of singular national developments. The stocktaking is very well done, and the overall conclusions are solid and honest. However, sometimes the academic urge to conceptualize developments – beyond obvious necessity – gets the upper hand.

The book is filling a knowledge gap which is of pivotal interest for policy makers and analysts of welfare state policy and patterns of social and economic development. On the whole this is fascinating reading for all those who still believe in the welfares state and perhaps a source of second thought for those who do not.

Michael Cichon (mcichon@icsw.org) is President of the International Council on Social Welfare (www.icsw.org).

Recommended citation: Cichon, Michael (2014) 'Development and social policy in South Asia. A specific type of welfare state in the making?', World Economy & Development In Brief, Issue 2/Mar-Apr, Luxembourg (www.wdev.eu)

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